Faced with a serious budget crisis, the government had
initially proposed to abolish these decried subsidies, which siphon billions of
dollars from public coffers every year but allow gas stations to sell gasoline
at prices far below the market.
In December 2021, the two organisations (NLC and TUC )
announced nationwide protests against the increase of petrol pump prices.
Although the federal government seems to be reversing, or at
least postponing, the plans to remove fuel subsidy, an extremely popular measure
in Africa's most populous country the trade unions appear to want to exercise
their democratic rights.
This is a highly sensitive and potentially explosive issue:
Nigerian consumers consider access to cheap fuel to be one of the few
privileges they enjoy from their poverty-stricken oil power.
Urging the NLC and TUC to call off the protests, Senate
President Ahmad Lawan on January 24 said that the federal government was
reconsidering the removal of the subsidy.
PRESS STATEMENT
— President of the Senate (@SPNigeria) January 24, 2022
Subsidy removal: Lawan urges NLC, TUC to shelve planned protests, says plan ‘unnecessary’
…As FG moves to suspend removal of fuel subsidy pic.twitter.com/rJzJBlcfnM
In November, Finance Minister Zainab Ahmed said she wanted
to end this "unsustainable" measure by June, in line with the
priorities set by the World Bank (WB) and the International Monetary Fund
(IMF). But to buy social peace, the government finally announced a change of
heart.
"It is clear that the timing is problematic, that there
is still rising inflation and that the removal of subsidies would only worsen
the situation and put more hardship on citizens," Ahmed told senators on
Monday.
Since the 1970s, the federal government - which spends more
on subsidies than on other key underdeveloped sectors such as education or
health - has been paying part of the cost of petroleum products.
Currently, a liter of petrol costs an average of 165 naira
(about 36 cents).
@NigeriaGov suspends planned fuel subsidy removal, proposes 18 months extension of the status quo to the @nassnigeria.#GovtAtWorkNG pic.twitter.com/XB55zO6WIO
— Government of Nigeria (@NigeriaGov) January 26, 2022
Over the past ten years, the authorities have tried to
remove these subsidies several times. Each time, they have had to backtrack in
the face of public anger, which has been whipped up by the unions.
In 2012, the army even took to the streets to maintain calm
during huge demonstrations.
"I don't see any government, even the one that comes in
after 2023, having the political will to change the system," said Cheta
Nwanze, a researcher at Nigerian consultancy SBM Intelligence.
However, the World Bank has recommended that Nigeria put an
end to it within the next six months to promote the diversification of its
economy, which is mainly based on black gold exports.
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